Badde Company Worksheet (partial) For the Month Ended April 30, 2014

Exercises: Set B 1 EXERCISES: SET B E4-1B The trial balance columns of the worksheet for Briscoe Company at June 30, 2014, are as follows. Complete the worksheet. (LO 1) Crisko Company Worksheet For the Month Ended June 30, 2014 Trial Balance Account Titles Dr. Cr. Cash $2,720 Accounts Receivable 2,440 Supplies 1,880 Accounts Payable $1,120 Unearned Service Revenue 240 Common Stock 4,000 Service Revenue 2,500 Salaries and Wages Expense 560 Miscellaneous Expense 260 $7,860 $7,860 Other data: 1. A physical count reveals $400 of supplies on hand. 2. $150 of the unearned revenue is still unearned at month-end. 3. Accrued salaries are $350. Enter the trial balance on a worksheet and complete the worksheet. E4-2B The adjusted trial balance columns of the worksheet for Badde Company are as follows. Complete the worksheet. (LO 1) Badde Company Worksheet (partial) For the Month Ended April 30, 2014 Adjusted Trial Income Balance Statement Balance Sheet Account Titles Dr. Cr. Dr. Cr. Dr. Cr. Cash 13,652 Accounts Receivable 7,840 Prepaid Rent 2,280 Equipment 23,000 Accumulated Depreciation Equipment 4,821 Notes Payable 5,500 Accounts Payable 5,872 Common Stock 25,000 Retained Earnings 5,890 Dividends 3,490 Service Revenue 15,700 Salaries and Wages Expense 11,000 Rent Expense 750 Depreciation Expense 771 Interest Expense 60 Interest Payable 60 Totals 62,843 62,843

2 4 Completing the Accounting Cycle Complete the worksheet. Prepare financial statements from worksheet. (LO 1, 6) Journalize and post closing entries and prepare a postclosing trial balance. (LO 2, 3) Prepare adjusting entries from a worksheet, and extend balances to worksheet columns. (LO 1) E4-3B Worksheet data for Badde Company are presented in E4-2B. No common stock was issued during April. Prepare an income statement, a retained earnings statement, and a classified balance sheet. E4-4B Worksheet data for Badde Company are presented in E4-2B. (a) Journalize the closing entries at April 30. (b) Post the closing entries to Income Summary and Retained Earnings. Use T accounts. (c) Prepare a post-closing trial balance at April 30. E4-5B The adjustments columns of the worksheet for Rick Company are shown below. Adjustments Account Titles Debit Credit Accounts Receivable 700 Prepaid Insurance 300 Accumulated Depreciation Equipment 800 Salaries and Wages Payable 400 Service Revenue 700 Salaries and Wages Expense 400 Insurance Expense 300 Depreciation Expense 800 2,200 2,200 (a) Prepare the adjusting entries. (b) Assuming the adjusted trial balance amount for each account is normal, indicate the financial statement column to which each balance should be extended. Derive adjusting entries from worksheet data. (LO 1) E4-6B Selected worksheet data for Reynolds Company are presented below. Adjusted Account Titles Trial Balance Trial Balance Dr. Cr. Dr. Cr. Accounts Receivable? 33,000 Prepaid Insurance 27,000 20,000 Supplies 8,000? Accumulated Depreciation Equipment 15,000? Salaries and Wages Payable? 6,000 Service Revenue 88,000 98,000 Insurance Expense? Depreciation Expense 9,000 Supplies Expense 3,000 Salaries and Wages Expense? 48,000 (a) Fill in the missing amounts. (b) Prepare the adjusting entries that were made.

Exercises: Set B 3 E4-7B Jared Johnson Company had the following adjusted trial balance. Jared Johnson Company Adjusted Trial Balance For the Month Ended June 30, 2014 Adjusted Trial Balance Account Titles Debits Credits Cash $ 3,712 Accounts Receivable 4,904 Supplies 480 Accounts Payable $ 1,992 Unearned Service Revenue 460 Common Stock 5,200 Retained Earnings 782 Dividends 500 Service Revenue 5,064 Salaries and Wages Expense 1,644 Miscellaneous Expense 456 Supplies Expense 2,250 Salaries and Wages Payable 448 $13,946 $13,946 Prepare closing entries, and prepare a post-closing trial balance. (LO 2, 3) (a) Prepare closing entries at June 30, 2014. (b) Prepare a post-closing trial balance. E4-8B Arapaho Company ended its fiscal year on July 31, 2014. The company s adjusted trial balance as of the end of its fiscal year is as shown below. Arapaho Company Adjusted Trial Balance July 31, 2014 No. Account Titles Debits Credits 101 Cash $ 15,940 112 Accounts Receivable 8,580 157 Equipment 16,900 158 Accumulated Depreciation Equipment $ 7,500 201 Accounts Payable 4,420 208 Unearned Rent Revenue 1,600 311 Common Stock 20,500 320 Retained Earnings 25,000 332 Dividends 14,000 400 Service Revenue 64,000 429 Rent Revenue 5,500 711 Depreciation Expense 4,500 726 Salaries and Wages Expense 54,700 732 Utilities Expense 13,900 $128,520 $128,520 Journalize and post closing entries, and prepare a postclosing trial balance. (LO 2, 3) (a) Prepare the closing entries using page J15. (b) Post to Retained Earnings and No. 350 Income Summary accounts. (Use the threecolumn form.) (c) Prepare a post-closing trial balance at July 31.

4 4 Completing the Accounting Cycle Prepare financial statements. (LO 6) Answer questions related to the accounting cycle. (LO 4) Prepare closing entries. (LO 2) E4-9B The adjusted trial balance for Arapaho Company is presented in E4-8B. (a) Prepare an income statement and a retained earnings statement for the year. (b) Prepare a classified balance sheet at July 31. E4-10B Lynn Stallworth has prepared the following list of statements about the accounting cycle. 1. Closing entries must be prepared before financial statements can be prepared. 2. The step of post to the ledger accounts occurs before the step of journalize the transactions. 3. All steps of the accounting cycle occur daily during the accounting period. 4. The accounting cycle begins with the analysis of business transactions and ends with the preparation of a post-closing trial balance. 5. If a worksheet is prepared, some steps of the accounting cycle are incorporated into the worksheet. 6. Correcting entries do not have to be part of the accounting cycle. 7. Reversing entries are a required step in the accounting cycle. 8. Journalize the transactions is the first step in the accounting cycle. Identify each statement as true or false. If false, indicate how to correct the statement. E4-11B Selected accounts for Nona s Salon are presented below. All June 30 postings are from closing entries. Salaries and Wages Expense 6/10 3,300 6/30 8,900 6/28 5,600 Service Revenue 6/30 16,100 6/15 5,700 6/24 8,400 Retained Earnings 6/30 2,700 6/1 14,000 6/30 2,400 Bal. 13,700 Supplies Expense 6/12 500 6/30 1,200 6/24 700 Rent Expense 6/1 3,600 6/30 3,600 Dividends 6/13 1,200 6/30 2,700 6/25 1,500 (a) Prepare the closing entries that were made. (b) Post the closing entries to Income Summary. Prepare correcting entries. (LO 5) Prepare correcting entries. (LO 5) E4-12B George Lucas Company discovered the following errors made in January 2014. 1. A payment of Salaries and Wages Expense of $500 was debited to Equipment and credited to Cash, both for $500. 2. A collection of $1,200 from a client on account was debited to Cash $120 and credited to Service Revenue $120. 3. The purchase of equipment on account for $890 was debited to Equipment $980 and credited to Accounts Payable $980. (a) Correct the errors by reversing the incorrect entry and preparing the correct entry. (b) Correct the errors without reversing the incorrect entry. E4-13B Dixon Company has an inexperienced accountant. During the first 2 weeks on the job, the accountant made the following errors in journalizing transactions. All entries were posted as made. 1. A payment on account of $540 to a creditor was debited to Accounts Payable $450 and credited to Cash $450. 2. The purchase of supplies on account for $650 was debited to Equipment $65 and credited to Accounts Payable $65. 3. A $600 cash dividend was debited to Salaries and Wages Expense $600 and credited to Cash $600. Prepare the correcting entries.

Exercises: Set B 5 E4-14B The adjusted trial balance for Katy Bowling Alley at December 31, 2014, contains the following accounts. Debits Credits Buildings $129,000 Common Stock $110,000 Accounts Receivable 15,000 Retained Earnings 5,000 Prepaid Insurance 5,200 Accumulated Depreciation Buildings 42,600 Cash 17,040 Accounts Payable 11,600 Equipment 62,500 Notes Payable 97,780 Land 63,000 Accumulated Depreciation Equipment 18,720 Insurance Expense 700 Interest Payable 2,600 Depreciation Expense 7,260 Bowling Revenues 14,000 Interest Expense 2,600 $302,300 $302,300 Prepare a classified balance sheet. (LO 6) (a) Prepare a classified balance sheet; assume that $12,900 of the note payable will be paid in 2015. (b) Comment on the liquidity of the company. E4-15B The following are the major balance sheet classifications. Current assets (CA) Current liabilities (CL) Long-term investments (LTI) Long-term liabilities (LTL) Property, plant, and equipment (PPE) Stockholders equity (SE) Intangible assets (IA) Classify each of the following accounts taken from Roberts Company s balance sheet. Accounts payable Accumulated depreciation Accounts receivable Buildings Unearned service revenue Interest payable Common stock Long-term debt Patents Supplies Salaries and wages payable Equipment Inventories Retained earnings Investments E4-16B The following items were taken from the financial statements of S. Evers Company. (All dollars are in thousands.) Long-term debt $ 980 Accumulated depreciation Equipment 5,600 Prepaid expenses 900 Accounts payable 1,500 Equipment 11,500 Notes payable after 2015 400 Long-term investments 285 Common stock 10,000 Short-term investments 3,700 Retained earnings 3,100 Notes payable in 2015 505 Accounts receivable 1,700 Cash $ 2,700 Inventories 1,300 Prepare a classified balance sheet in good form as of December 31, 2014. E4-17B These financial statement items are for N. Biden Company Inc. at year-end, July 31, 2014. Salaries and wages payable $ 2,400 Note payable (long-term) $ 2,100 Salaries and wages expense 52,000 Cash 25,300 Utilities expense 23,000 Accounts receivable 9,700 Equipment 18,000 Accumulated depreciation equipment 5,000 Accounts payable 4,300 Dividends 3,000 Service revenue 61,500 Depreciation expense 3,900 Rent revenue 8,400 Retained earnings (beginning 21,200 Common stock 30,000 of the year) Classify accounts on balance sheet. (LO 6) Prepare a classified balance sheet. (LO 6) Prepare financial statements. (LO 1, 6)

6 4 Completing the Accounting Cycle (a) Prepare an income statement and a retained earnings statement for the year. (b) Prepare a classified balance sheet at July 31. Use reversing entries. (LO 7) *E4-18B Valens Company pays salaries of $12,000 every Monday for the preceding 5-day week (Monday through Friday). Assume December 31 falls on a Wednesday, so Valens s employes have worked 3 days without being paid. (a) Assume the company does not use reversing entries. Prepare the December 31 adjusting entry and the entry on Monday, January 5, when Valens pays the payroll. (b) Assume the company does use reversing entries. Prepare the December 31 adjusting entry, the January 1 reversing entry, and the entry on Monday, January 5, when Valens pays the payroll. Prepare closing and reversing entries. (LO 2, 4, 7) *E4-19B On December 31, the adjusted trial balance of E-Z Employment Agency shows the following selected data. Accounts Receivable $25,000 Service Revenue $90,000 Interest Expense 7,500 Interest Payable 1,800 Analysis shows that adjusting entries were made to (1) accrue $4,300 of service revenue and (2) accrue $1,800 interest expense. (a) Prepare the closing entries for the temporary accounts shown above at December 31. (b) Prepare the reversing entries on January 1. (c) Post the entries in (a) and (b). Rule and balance the accounts. (Use T accounts.) (d) Prepare the entries to record (1) the collection of the accrued revenue on January 10 and (2) the payment of all interest due ($2,700) on January 15. (e) Post the entries in (d) to the temporary accounts. PROBLEMS: SET C Prepare worksheet, financial statements, and adjusting and closing entries. (LO 1, 2, 3, 6) P4-1C The trial balance columns of the worksheet for Rosen Roofing Inc. at March 31, 2014 are as follows. Rosen Roofing Inc. Worksheet For the Month Ended March 31, 2014 Trial Balance Account Titles Dr. Cr. Cash 4,600 Accounts Receivable 3,200 Supplies 2,500 Equipment 12,000 Accumulated Depreciation Equipment 1,350 Accounts Payable 3,000 Unearned Service Revenue 580 Common Stock 12,900 Dividends 1,200 Service Revenue 7,300 Salaries and Wages Expense 1,200 Miscellaneous Expense 430 25,130 25,130

Problems: Set C 7 Other data: 1. A physical count reveals only $850 of supplies on hand. 2. Depreciation for March is $200. 3. Unearned revenue amounted to $190 at March 31. 4. Accrued salaries are $500. (a) Enter the trial balance on a worksheet and complete the worksheet. (b) Prepare an income statement and a retained earnings statement for the month of March and a classified balance sheet at March 31. (c) Journalize the adjusting entries from the adjustments columns of the worksheet. (d) Journalize the closing entries from the financial statement columns of the worksheet. P4-2C The adjusted trial balance columns of the worksheet for Ward Company Inc. are as follows. Ward Company Inc. Worksheet For the Year Ended December 31, 2014 Adjusted Account Trial Balance No. Account Titles Dr. Cr. 101 Cash 8,300 112 Accounts Receivable 11,800 126 Supplies 1,700 130 Prepaid Insurance 2,400 151 Equipment 25,000 152 Accumulated Depreciation Equipment 7,000 200 Notes Payable 14,000 201 Accounts Payable 6,500 212 Salaries and Wages Payable 3,500 230 Interest Payable 500 311 Common Stock 12,000 320 Retained Earnings 6,000 332 Dividends 6,000 400 Service Revenue 60,000 610 Advertising Expense 8,500 631 Supplies Expense 3,000 711 Depreciation Expense 5,500 722 Insurance Expense 3,600 726 Salaries and Wages Expense 33,000 905 Interest Expense 700 Totals 109,500 109,500 (a) Adjusted trial balance $25,830 (b) Net income $3,710 Total assets $19,100 Complete worksheet; prepare financial statements, closing entries, and post-closing trial balance. (LO 1, 2, 3, 6) (a) Complete the worksheet by extending the balances to the financial statement columns. (b) Prepare an income statement, a retained earnings statement, and a classified balance sheet. (Note: $8,000 of the notes payable become due in 2015.) (c) Prepare the closing entries. Use J14 for the journal page. (d) Post the closing entries. Use the three-column form of account. Income Summary is No. 350. (e) Prepare a post-closing trial balance. P4-3C The completed financial statement columns of the worksheet for Waters Company are shown on the next page. (a) Net income $5,700 (b) Current assets $24,200; Current liabilities $18,500 (e) Post-closing trial balance $49,200 Prepare financial statements, closing entries, and postclosing trial balance. (LO 1, 2, 3, 6)

8 4 Completing the Accounting Cycle Waters Company Worksheet For the Year Ended December 31, 2014 Account Income Statement Balance Sheet No. Account Titles Dr. Cr. Dr. Cr. 101 Cash 17,700 112 Accounts Receivable 10,600 130 Prepaid Insurance 2,500 157 Equipment 20,000 167 Accumulated Depreciation Equipment 4,300 201 Accounts Payable 8,000 212 Salaries and Wages Payable 2,200 311 Common Stock 22,000 320 Retained Earnings 8,300 332 Dividends 9,000 400 Service Revenue 54,000 622 Maintenance and Repairs Expense 1,500 711 Depreciation Expense 2,000 722 Insurance Expense 1,600 726 Salaries and Wages Expense 32,000 732 Utilities Expense 1,900 Totals 39,000 54,000 59,800 44,800 Net Income 15,000 15,000 54,000 54,000 59,800 59,800 (a) Ending retained earnings $14,300; Total current assets $30,800 (d) Post-closing trial balance $50,800 Complete worksheet; prepare classified balance sheet, entries, and post-closing trial balance. (LO 1, 2, 3, 6) (a) Prepare an income statement, a retained earnings statement, and a classified balance sheet. (b) Prepare the closing entries. (c) Post the closing entries and rule and balance the accounts. Use T accounts. Income Summary is account No. 350. (d) Prepare a post-closing trial balance. P4-4C Garner Management Services Inc. began business on January 1, 2014, with a capital investment of $110,000. The company manages condominiums for owners (Service Revenue) and rents space in its own office building (Rent Revenue). The trial balance and adjusted trial balance columns of the worksheet at the end of the first year are as follows.

Problems: Set C 9 Garner Management Services Inc. Worksheet For the Year Ended December 31, 2014 Adjusted Trial Balance Trial Balance Account Titles Dr. Cr. Dr. Cr. Cash 14,000 14,000 Accounts Receivable 30,300 30,300 Prepaid Insurance 3,000 2,000 Land 77,000 77,000 Buildings 126,000 126,000 Equipment 58,000 58,000 Accounts Payable 12,700 12,700 Unearned Rent Revenue 5,400 2,500 Mortgage Payable 122,000 122,000 Common Stock 110,000 110,000 Retained Earnings 42,000 42,000 Dividends 21,000 21,000 Service Revenue 88,700 88,700 Rent Revenue 27,500 30,400 Salaries and Wages Expense 41,000 41,000 Advertising Expense 20,000 20,000 Utilities Expense 18,000 18,000 Totals 408,300 408,300 Insurance Expense 1,000 Depreciation Expense 7,000 Accumulated Depreciation Buildings 2,500 Accumulated Depreciation Equipment 4,500 Interest Expense 9,000 Interest Payable 9,000 Totals 424,300 424,300 (a) Prepare a complete worksheet. (b) Prepare a classified balance sheet. (Note: $25,000 of the mortgage payable is due for payment next year.) (c) Journalize the adjusting entries. (d) Journalize the closing entries. (e) Prepare a post-closing trial balance. P4-5C Lisa Huang opened Huang s Cleaning Service Inc. on July 1, 2014. During July the following transactions were completed. July 1 Stockholders invested $25,000 cash in the business in exchange for common stock. 1 Purchased used truck for $12,000, paying $5,000 cash and the balance on account. 3 Purchased supplies for $2,400 on account. 5 Paid $2,400 cash on one-year insurance policy effective July 1. 12 Billed customers $4,900 for cleaning services. 18 Paid $1,800 cash on amount owed on truck and $1,500 on amount owed on supplies. 20 Paid $2,400 cash for employee salaries. 21 Collected $3,800 cash from customers billed on July 12. 25 Billed customers $9,700 for cleaning services. 31 Paid gasoline for month on truck $360. 31 Declared and paid a $1,400 cash dividend. (a) Net income $23,100 (b) Total current assets $46,300 (e) Post-closing trial balance $307,300 Complete all steps in accounting cycle. (LO 1, 2, 3, 4, 6)

10 4 Completing the Accounting Cycle The chart of accounts for Huang s Cleaning Service Inc. contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation Equipment, No. 201 Accounts Payable, No. 212 Salaries and Wages Payable, No. 311 Common Stock, No. 320 Retained Earnings, No. 332 Dividends, No. 350 Income Summary, No. 400 Service Revenue, No. 633 Gasoline Expense, No. 634 Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries and Wages Expense. (b) Trial balance $45,700 (c) Adjusted trial balance $50,000 (d) Net income $11,240; Total assets $42,140 (g) Post-closing trial balance $42,340 (a) Journalize and post the July transactions. Use page J1 for the journal and the threecolumn form of account. (b) Prepare a trial balance at July 31 on a worksheet. (c) Enter the following adjustments on the worksheet and complete the worksheet. (1) Services provided but unbilled and uncollected at July 31 were $2,900. (2) Depreciation on equipment for the month was $200. (3) One-twelfth of the insurance expired. (4) An inventory count shows $500 of supplies on hand at July 31. (5) Accrued but unpaid employee salaries were $1,200. (d) Prepare the income statement and retained earnings statement for July and a classified balance sheet at July 31. (e) Journalize and post adjusting entries. Use page J2 for the journal. (f) Journalize and post closing entries and complete the closing process. Use page J3 for the journal. (g) Prepare a post-closing trial balance at July 31.